The core difference: access versus interest

A money market account lets you write checks and use a debit card, while a savings account does not. That is the practical distinction that matters most. Both are FDIC-insured deposit accounts held at a bank, both earn interest, and both have federal limits on how many withdrawals you can make per month. But a money market account gives you the ability to access your money the way you would with a checking account — by writing a check or swiping a card — while a savings account requires you to transfer money out or visit a teller.

In exchange for that access, money market accounts typically require a higher opening balance. Many banks require $2,500 to $10,000 to open one, though some online banks have lowered that floor. Savings accounts often have no minimum or a much smaller one. The interest rate on a money market account is usually higher than a savings account at the same bank, but that advantage shrinks or disappears when you compare across different banks — an online savings account at one institution might pay more than a money market account at another.

Key Takeaways

  • Money market accounts let you write checks and use a debit card; savings accounts do not, and require a transfer or teller visit to withdraw funds.
  • Money market accounts typically require a higher opening balance, often $2,500 to $10,000, while savings accounts may have no minimum or a much lower one.
  • Both account types are FDIC-insured and both have federal limits on the number of withdrawals you can make each month.
  • Interest rates vary by bank and by account type within the same bank, so comparing rates across institutions matters more than the account category itself.

How withdrawal limits work on both accounts

Federal rules cap the number of withdrawals you can make from a savings account or money market account at six per month. This limit applies to transfers and withdrawals initiated outside the bank — so a phone transfer, an online transfer, or an ACH payment counts toward the limit. Withdrawals made in person at a teller or at an ATM do not count.

The six-withdrawal rule exists because these accounts are meant for saving, not for frequent spending. If you need to move money in and out constantly, a checking account is the right tool. That said, many banks have relaxed enforcement of this rule in practice, especially during the pandemic, so it is worth asking your bank what their actual policy is. Some banks will charge a fee if you exceed the limit; others will straightforward close the account or convert it to a checking account.

Interest rates and how they compare

Money market accounts at traditional banks typically pay 0.01% to 0.50% annual percentage yield (APY), depending on the bank and the current interest rate environment. Savings accounts at the same banks pay roughly the same or slightly less. Online banks, which have lower overhead, often pay higher rates on both account types — sometimes 4% to 5% APY on savings accounts and money market accounts alike.

The difference in rate between a money market account and a savings account at the same bank is usually small — often 0.10% to 0.25% APY. Over a year, that difference on a $10,000 balance amounts to $10 to $25. The difference between a traditional bank and an online bank is far larger. A savings account earning 4.5% APY at an online bank will earn you roughly $450 per year on $10,000, while a money market account earning 0.25% APY at a traditional bank will earn you $25. The account type matters less than where you hold it.

When a money market account makes sense

A money market account is useful if you want to earn interest on money you need to access by check or card, but you do not want a checking account. Some people use them as a bridge between savings and checking — money sits in the money market account earning interest, and they write checks against it for larger, planned expenses. Others use them because their bank offers a better rate on money market accounts than savings accounts, and they value the check-writing ability enough to justify the higher minimum balance.

If you rarely write checks and do not need card access, a savings account will serve you just as well and may have a lower minimum balance. If you write checks frequently or need to move money in and out constantly, a checking account is the right choice, even if it earns little or no interest. The account type should match how you actually use the money.

FDIC insurance and account limits

Both money market accounts and savings accounts are insured by the FDIC up to $250,000 per depositor, per bank. If you hold both a money market account and a savings account at the same bank, they are insured separately — so you can have $250,000 in each and both are fully protected. If you have multiple savings accounts at the same bank, they are added together and insured as one account, so the total protection across all of them is $250,000.

This distinction matters if you are holding a large balance. If you have $300,000 to deposit, you could put $250,000 in a money market account and $250,000 in a savings account at the same bank and have both amounts fully insured. You could not put $300,000 in two savings accounts at the same bank and have both amounts insured — the FDIC would treat them as a single account with $300,000 in it, leaving $50,000 uninsured.

Fees and account maintenance

Money market accounts often carry monthly maintenance fees, especially at traditional banks. These fees range from $5 to $25 per month and are sometimes waived if you maintain a minimum balance or set up direct deposit. Savings accounts may also have maintenance fees, but they are less common, and online banks typically charge no monthly fee on either account type.

Some banks charge a fee if you exceed the six-withdrawal limit in a month. Others charge a fee for falling below the minimum balance. A few charge a fee straightforward for inactivity — if you do not make a deposit or withdrawal for a certain period, usually six months to a year. Read the fee schedule before opening an account, and ask whether fees are waived under certain conditions. A higher interest rate can be wiped out by a $10 monthly fee.

Money market accounts versus money market funds

A money market account is a bank deposit account insured by the FDIC. A money market fund is an investment product sold by brokerages and mutual fund companies. They are not the same thing, and the names cause real confusion. A money market fund invests your money in short-term debt securities and is not FDIC-insured — if the fund loses value, you lose money. A money market account is a savings product that earns interest and is FDIC-insured up to $250,000.

If you see "money market" in a bank's product list, it is almost certainly a money market account. If you see it in a brokerage's product list, it is probably a money market fund. The difference matters for safety and insurance, so confirm which one you are opening before you deposit money.

Frequently Asked Questions

Can I use a money market account like a checking account?

Partially. You can write checks and sometimes use a debit card, but you are limited to six withdrawals per month by federal rule. A checking account has no withdrawal limit, so if you write many checks or need frequent access, a checking account is the better choice.

Do I earn more interest in a money market account than a savings account?

At the same bank, a money market account usually earns slightly more — often 0.10% to 0.25% APY higher. But an online savings account at a different bank will almost always pay more than either one. Shop across banks before deciding based on account type.

What happens if I exceed the six-withdrawal limit?

Banks handle this differently. Some charge a fee per excess withdrawal, usually $5 to $10. Others convert your account to a checking account or close it. Ask your bank what their policy is before you open the account.

Is my money safe in a money market account?

Yes, up to $250,000 per depositor, per bank. The FDIC insures money market accounts the same way it insures savings accounts. If your balance exceeds $250,000, the amount over that limit is not insured.

Should I choose a money market account or a savings account?

Choose based on how you use the money. If you need to write checks or use a card, choose a money market account. If you rarely access the money and do not need check-writing ability, a savings account works just as well and may have a lower minimum balance.